target costing

9344 Words38 Pages
Basics
Fixed costs
Activ. Based
Costing
Target Cost.
Life-Cycle
Costing
Cost Benchmarking
Prof. Dr. P. Weber-Dreßler
Stategic Costing.ppt (p. 1)

Strategic Costing

Strategic Costing

Basics

Contents

Fixed costs

Part 1: Basics to strategic costing
1. Traditional costing vs. strategic costing
2. Specifics of strategic costing
3. Tools of strategic costing

Activ. Based
Costing
Target Cost.
Life-Cycle
Costing
Cost Benchmarking
Prof. Dr. P. Weber-Dreßler
Stategic Costing.ppt (p. 2)

Part 2: Management of fixed costs
1. Characteristics of fixed costs management
2. Limitations on fixed costs reduction
3. Discussion

Strategic Costing

Basics

Contents contd.

Fixed costs

Part 3:
…show more content…
product elimination)

1. Traditional costing vs. strategic costing

Basics
Fixed costs
Activ. Based
Costing
Target Cost.
Life-Cycle
Costing

l Example: Product elimination
Assumptions:
Products A and B
Product A:
Product B:
Fixed costs:

2.000 units
1.600 units
18.000 €
A

Price
- variable costs
- fixed costs
Net profit per unit

B

7€
4€
5€

12 €
4€
5€

-2 €

3€

Consequence: Elimination of product A due to loss making

Cost Benchmarking
Prof. Dr. P. Weber-Dreßler
Stategic Costing.ppt (p. 10)

B
Sales
- variable costs
- fixed costs
Total loss

1.600 units x 12 € =
1.600 x 4€ =

19.200 €
6.400 €
18.000 €
-5.200 €

1. Traditional costing vs. strategic costing

Basics
Fixed costs
Activ. Based
Costing

l Example: Product elimination contd.
No elimination of product A
B
Sales
- variable costs

Target Cost.
Life-Cycle
Costing
Cost Benchmarking
Prof. Dr. P. Weber-Dreßler
Stategic Costing.ppt (p. 11)

1.600 units x 12 €
2.000 units x 7 € =
1.600 x 4 € =
2.000 units x 4 € =

- fixed costs
Total profit

19.200 €
14.000 €
6.400 €
8.000 €
18.000 €
800 €

Explanations:
Elimination of product A might be a wrong

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